New Economic Perspectives Tue 2010-08-03 14:12 EDT
The CBO's Misplaced Fear of a Looming Fiscal Crisis
The Congressional Budget Office (CBO) has just released an 8-page brief titled "Federal Debt and the Risk of a Fiscal Crisis." In it you will find all the traditional arguments regarding government deficits and debt: "unsustainability," "crowding out", bond rates rising to "unaffordable" levels because of fears that the Treasury would default or "monetize the debt," the need to raise taxes to pay for interest servicing and government spending, the need "to restore investor's confidence" by cutting government spending and raising taxes. This gives us an opportunity to go over those issues one more time...
CBO's Misplaced Fear; looming fiscal crisis; New Economic Perspectives.